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Online Video

Online Video

Recently YouTube’s Karen Stocks wrote the reason advertising dollars weren’t flowing to user-generated content was that marketing people didn’t understand the viewing habits of the digital audience. She seemed to be saying that because users did not discern between UGC and “premium” content, nor should advertisers. When you look at YouTube’s UGC-heavy content mix, it’s an understandable position. Understandable, but somewhat disingenuous. Content quality and environment matter to both users and sponsors.

Just because audiences are consuming UGC does not mean advertisers will, or should, automatically follow. Sponsor creative is as likely to be placed next to footage of cats doing funny things as images of teenagers throwing kittens into a river. It’s an unnecessary gamble for advertisers. That’s why YouTube is building a suite of “safe” channels in which content is professional and controlled. This they can monetise.

Most readers would understand the concept of user-generated content. “Amateur” is a suitable proxy. The definition of “premium” is less straightforward. Perhaps a reasonable definition is video content and environments that brand advertisers are happy to sponsor. Not all professional content is premium in this sense. Graphic, but professionally produced, news footage is not a good fit for many brands. Some UGC content is premium. YouTube’s example, videographer Natalie Tran, has moved from amateur to professional as she has grown her audience, honed her production chops and taken on sponsors. In another example, Nine News iPhone app subscribers can submit their UGC footage to the Nine newsroom. If the pictures are newsworthy enough, they get a run in the 6pm TV bulletin. With more than 120,000 downloads in its first 10 days, Nine has added some serious amateur muscle to it professional news machine. If it’s good enough, this UGC will be broadcast alongside the professional material, just as we saw with the Queensland floods and tsunami in Japan. The catalyst turning UGC into premium content is professional editorial curation. Real-life professional editors and producers making editorial decisions on the fly are key differentiators for the bigger news and information publishers against the free-for-all UGC environments.

It is understandable that advertisers are generally willing to pay more to sponsor professional content than they are for UGC. Professional short-form news, sport and entertainment clips will attract higher rates than YouTube’s standard fare. Long-form programming, such as catch-up and catalogue TV shows, is even more valuable to advertisers. The two main drivers for this natural yield curve are environment and user mindset.

Short form users are snacking users. They might arrive at YouTube from a Facebook link and exit soon after. Exposure to pre-roll or display advertising is limited, there might be frequency issues and the content they view may or may not be an appropriate fit for the advertiser’s message.

The next step up the food chain is premium short-form. It’s still snacking content but adheres to a set of professional standards that ensures it is not offensive, graphic or poorly produced. Anything that is unsuitable plays without ads. These news, entertainment, lifestyle and sport clips are the bread and butter of Ninemsn, Yahoo7, Fairfax and News. At ninemsn, we’ve found users watching video inside articles consume more streams than those viewing in a stand-alone index. Our theory is that audiences in articles are more engaged in the story and more compelled to watch videos that contribute to this story telling.

The undisputed heavyweight champion of video engagement is long-form programming. This allows advertisers to deliver their messages alongside catch-up TV content that the user has consciously sought out and spends more time with. Consumers are more immersed in the content and more likely to return regularly, thus more likely to look upon sponsors favourably. In less than a year, FIXPlay, ninemsn’s long form video destination, has doubled its audience size. Catch-up and catalogue video currently contributes a small but growing percentage of ninemsn’s 20 million monthly streams and a disproportionate amount of time spent.

As mobile technologies become more widely dispersed, we can expect to see a greater percentage of UGC in the content mix, particularly in news. This won’t affect the value of the news sponsorships for marketers because news is mostly a curated environment. The trouble for marketers would come if they blithely followed the eyeballs wherever they went. There are some very popular but undesirable destinations on the web.

Audience size is important. More important is getting into the right environment, with the right content mix, to create a strong and lasting relationship with the right audience.

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